ZKSwap 2.0

Validity proofs ensure state correctness[Edit][Issue]

Each update to the system state must be accompanied by a ZK Proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. Once the proof is processed on the Ethereum blockchain the L2 block is instantly finalized.^[1]

Zero knowledge SNARK cryptography is used[Edit][Issue]

Despite their production use ZK-SNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition ZK-SNARKs require a trusted setup to operate.^[2]

• Funds can be stolen if the cryptography is broken or implemented incorrectly.

All data required for proofs is published on chain[Edit][Issue]

All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.^[1]

The system has a centralized operator[Edit][Issue]

The operator is the only entity that can propose blocks. A live and trustworthy operator is vital to the health of the system.^[3]

• MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.

Users can force exit the system[Edit][Issue]

Force exit allows the users to escape censorship by withdrawing their funds. The system allows users to force the withdrawal of funds by submitting a request directly to the contract on-chain. The request must be served within a defined time period. If this does not happen, the system will halt regular operation and permit trustless withdrawal of funds.^[4]

• Users can be censored if the operator refuses to include their transactions. They can still exit the system.

Regular exit[Edit][Issue]

The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is proven the funds become available for withdrawal on L1. Finally the user submits an L1 transaction to claim the funds. This transaction does not require a merkle proof.^[5]

Forced exit[Edit][Issue]

If the user experiences censorship from the operator with regular exit they can submit their withdrawal requests directly on L1. The system is then obliged to service this request. Once the force operation is submitted if the request is serviced the operation follows the flow of a regular exit.^[4]

Emergency exit[Edit][Issue]

If enough time passes and the forced exit is still ignored the user can put the system into Exodus Mode, disallowing further state updates. In that case everybody can withdraw by submitting a zero knowledge proof of their funds with their L1 transaction.^[6]

• Funds can be lost if the user is unable to generate the non-trivial zk proof for exodus withdraw.